older blog posts on the subject to frame the activity a bit. Here's what we had to do:
- Make a list of what you have to pay by date.
- Plot these payments on a calendar
- Write on the Calendar when you're paid, and how much
- Determine which bills can be paid for by which paycheque (here - if because you don't have enough funds, you're meant to call and move your billing dates.)
- In the calendar, indicate the 'paid' date beside the bill
Okay! So I thought the best way to do this for Jordan and I is to use Google-Calendar, because we track all of our other activities that way anyways.
To the left you can see all of our bills, and the dates as well as our paydays (green box). That takes care of step 1-3.
The next is to sort out which bills can be paid for by which pay cheque.
We'll start with the first series of transactions, just prior to being paid on April 11th. All of these need to be paid for by the pay days that preceded it, less the amounts that occur on the same day as payday on March 28th (planned spending, and mortgage).
So - combined, Jordan and I will be paid $2,785.92 at the end of March. I'll deduct $770.22 and $1,150 for planned spending - which leaves me with $865.70.
Prior to the next pay day (April 11th), we have $963.87 in payments which leaves us overdrawn by $98.17. The problem here, is that not only would we be overdrawn by about $100, we also have several transactions about to happen and if the timing isn't perfect on our automatic payments and withdrawals, we could be in deep ca-ca.
Let's keep going to see if it get's any worse.
From here, I can add one more pay day (mine), and deduct the transactions on April 11th, and the 14th. That brings our balance down to $362.12. But...we have a pay day, so we'll top up the account and settle at $667.53. Following Jordan's payday on the 15th - we have payments on the 20th, 21st, and 22nd and our account is brought down to $191.08. Following that, it's payday again, along with our planned spending and mortgage payments. Again - depending on the order that the automatic transactions take place, we could be in trouble - but when the dust settles, we're up again to $956.78, ready to tackle the payments at the beginning of May.
There's a lot of ups and downs here! Traditionally, what we have done to avoid overdraft (haven't paid an OD fee once in my life), is keep our own buffer, or cash overdraft if you will, of $2,800 in our chequing account which helps us manage all of the flexibility of the ins/outs of our cash flow.
I get the feeling though, is that if we followed Gail's method, and perhaps moved some payments around - that our 'buffer' wouldn't have to be so large. I'm not ready to call this task complete - I think I'm going to look at the numbers some more and see if I can't get some of the payments that happen in/around the 8th of the month, moved to the second half, after the 15th.